What is Accidental Death & Dismemberment (AD&D) Coverage?
Feb 10, 2020
We get many phone calls from people asking what Accidental Death & Dismemberment is. Admittedly, it has a strange name and seems odd it you haven’t heard of it!
You can probably guess that it’s a benefit related to an accident. Generally, it is a layer of financial protection that is provided if you die or lose a body part because of an accident. And while no one likes to think about accidents happening, they do and with regularity. According to Medical News Today, unintentional accidents are the fourth leading cause of death in the United States.
Because accidents happen without warning, there is no time to prepare for them. They can be emotionally, physically, and financially devastating. If you die because of an accident, an AD&D benefit could provide additional financial help to your loved ones. If you suffer a physical dismemberment in an accident, AD&D coverage could provide funds for you to use as you recover and deal with a drastic change in your life.
What is AD&D?
It is a benefit that pays a set amount (called the principal sum) if the insured person dies due to an accident. It also pays if the insured person loses a body part due to an accident. Some plans include coverage for paraplegia, quadriplegia, hemiplegia, uniplegia, loss of sight, speech and hearing. The payment for losses, other than death, is usually represented as a percentage of the principal sum. The plan document will state the percentage payment and often includes a table listing the covered losses and corresponding percentages. The covered items can vary from plan to plan, so always read your plan document to learn what is covered.
There must be an accident
It’s important to remember that the AD&D benefit only pays if the loss is due to an accident, as defined in the plan document. Most definitions will rule out any connection to illness or self-inflicted causes. So, if you died from pneumonia (an illness), the benefit would not pay.
Timing of the loss
The loss must occur within the specified time from the date of the accident, and it can vary by plan (some examples include 90, 181, or 365 days). So, if you die due to a covered accident, the insurance company will pay only if your death occurred within the specified number of days of the accident.
Choose a beneficiary
If you have AD&D coverage, it’s best to choose a beneficiary to receive the death benefit. Otherwise, the benefit will be paid to your estate.
When purchasing a Seven Corners plan specifically, you will find the option to select an AD&D beneficiary on Step 3 of the process when you're providing contact information. See below
- while we do indicate that it is optional, it is highly recommended to designate an individual in case of an accident.
Types of AD&D benefits
There are different types of AD&D benefits. To understand what is covered and how it is covered, you should read your plan document. Here are a few types of benefits that we offer on our plans:
24-hour AD&D — This provides 24-hour coverage for losses due to accidents. The list of losses covered is shown in the plan document.
Common Carrier Accidental Death — This pays only if you die (it says death and does not add dismemberment) while covered and if your death is due to an accident that occurred while you were riding as a passenger on a common carrier. What’s a common carrier? This varies by plan, so read your plan document to know for sure. For our Liaison Continent plan, it is any public air conveyance operating with a valid license and transporting passengers for hire. So, with this definition, you’re not covered while you’re on a train nor are you covered if you’re in your Uncle Bill’s airplane that he uses for family vacations.
Flight Accident AD&D — This benefit is optional on some of our trip cancellation plans and generally covers you while riding as a passenger on an aircraft and while boarding or alighting from an aircraft.
How helpful is AD&D?
Some people aren’t big fans of AD&D because there are several specific requirements that must be met to receive the benefits. And it’s definitely no substitute for buying life insurance. However, standalone policies are usually very affordable and options to increase baseline AD&D benefits are typically inexpensive. Bottom line — it provides extra protection for you and your loved ones to deal with an unexpected change in circumstances.
Clearly, accidents occur with frequency and can be devastating. If you lose a limb, there will be huge physical and financial effects. You may be unable to work for a time or possibly indefinitely. Likewise, death brings with it large financial issues for loved ones left behind. And it’s always better to be prepared. In a nutshell, that’s the basis for any kind of insurance. You pay a known amount to protect you for an unknown and potentially disastrous event.
Seven Corners’ AD&D
We offer AD&D on many of our travel insurance policies for no extra charge. We also offer plans which provide a base amount of AD&D coverage that you can increase for a small fee. Many carriers also offer standalone AD&D policies.